Despite gyms still being shut, due to COVID-19, Anytime Fitness UK’s long-term ambitions haven’t been blunted. CEO Neil Randall explains to Elite Franchise what they are.
Despite gyms still
being shut, due to COVID-19, Anytime Fitness UK’s long-term ambitions haven’t
been blunted. CEO Neil Randall explains to Elite Franchise what they are.
As challenges go, taking over a fitness company during a global pandemic takes some beating. But Anytime Fitness UK CEO, Neil Randall - who assumed the reigns in April 2020 - aims to prove he’s up to the task.
As the company navigates its way through choppy COVID-19 waters its long successful business model won’t be tinkered with anytime soon. Nor should it be, given the Minnesota-based parent company already has 165+ sites in the UK and 4,500 globally in more than 35 countries.
In the short term though, the prime focus for Randall is to continue providing an ethical franchise ecosystem that “engages, coaches, encourages and supports its franchisees to be successful.”
“We will continue to refine and improve our offering as we always have,” he adds.
Randall relies on a large support office team with vast industry/sector experience in fitness and franchising. This, coupled with a strong brand purpose of caring about peoples’ health and taking the time to help them succeed, has proven a recipe for success.
Indeed, COVID-19 or not, it’s still full steam ahead for Anytime Fitness UK; the company having welcomed a number of new franchisees into its community during lockdown with franchisees already engaged with its property experts. Randall and the team have created a re-launch programme ‘Together we rise’ for franchisees with over 37 webinars held in June to launch with exceptional safety and service and has led a weekly Q&A with franchisees during COVID-19 which will continue after lockdown.
Four new clubs have been completed - those likely to open when lockdown rules are further eased to include gyms. And with a possible 8-10 clubs opening their doors by the end of the year (5-8 aiming for early 2021) the key takeaway is that the company will re-open with more clubs than it had when it first shut down its operations in March.
With a degree in Sports Science and Psychology, and extensive experience in the fitness, wellness and sports space, Randall is more than equipped to ensure Anytime Fitness UK’s longer term goals are achieved.
Starting out his career with Holmes Place back in the early 2000’s, Randall “fell in love with the industry” and has never really looked back.
One of his more interesting experiences there, as a fitness manager, was holding the pads for American actor, Frank Oz, who liked to box - Oz in another incarnation being the voice behind ‘Yoda’ from the ‘Star Wars’ franchise.
At Holmes Place Randall quickly progressed through the ranks into Fitness Management, Project Management (product rollouts) and then General Management.
The company was subsequently acquired by Virgin Active, though Randall stayed on for a further five years (until 2010), managing 5 clubs and supporting the L&D team in coaching/mentoring club teams through their development programmes.
After leaving Virgin Active Randall went to LA Fitness - a company that at the time was looking to rebrand as well as growing its field team. Taking up the role of a regional director, Randall would stay for 5 years until LA Fitness itself was acquired by Pure Gym.
Randall was then (November 2015) approached by Leisure, Sport and Wellness brand owner GO Mammoth - a company embarking on a growth and scale plan of its own. There he was to lead an HQ team managing over 100 sports venues across the country, running after work social sports leagues, on-site corporate wellness programmes, fitness classes and social sports led holidays.
The final piece of the puzzle slotted into place in late 2017 when Randall was asked by Anytime Fitness to join the master franchise with a view to aggressively growing its brand presence in the UK.
“I started by heading up Sales and Marketing to set in place the strategy to improve brand awareness through distribution, but also by welcoming new franchisees into the network who were motivated to find properties and open their first gyms,” he says.
As things started to grow Randall’s role quickly took on a broader remit, becoming COO and later CEO. “When Stuart Broster stepped away from the business earlier this year, I was backed by our board to lead the brand onward as CEO, a role that had been an aspiration of mine since quite early in my career,” he says.
For Randall, ‘purpose’ and ‘opportunity’ were the big attractions of Anytime Fitness UK. Moreover, the brand had a solid foundation in terms of size/ number of gyms and “stood for something I believe in,” namely health and wellness being accessible for all. It is also, as he puts it: “A (inter)nationally led brand with a local edge driven by our talented franchisees.”
Though the brand wasn’t well known it had a great story to tell, Randall opines. “I felt I had a great opportunity to be part of the team that grows both the size but also the sentiment the brand holds with its members and the communities that they serve,” he notes.
In a career that has focused on brand development, marketing and sales have, unsurprisingly, been very important - Randall arguing that sales are the life blood of most businesses and being comfortable with that and having the ability to both sell, but also coach colleagues to be better at selling, has been absolutely critical.
He adds: “Marketing, and being able to distribute your brand and message to the right people at the right time, using the right channel helps to maximise opportunities…I feel as a CEO now, being comfortable in both of those disciplines.”
For would be franchisees the required financial commitment is a minimum 170K to be expected. Overall project costs (per franchisee basis) run from £400K-600K; determined by location and size of property.
From a franchise profile standpoint average gym size is 5K-7K, with a typical monthly membership yield of £34 - based on average membership per club of 1059 - and average length of stay (as a member) of 18.9 months.
Randall is quick to point out however that costs are always under review as the company is constantly looking for ways to drive economies of scale based on its size.
“Our project costs have reduced, (while) our average members per unit, yield and length of stay have continually edged forward,” he says.
And he adds: “This is where the franchise benefit really comes through - the opportunity to secure great sites with improved costs has increased and so there has never been a better time to join a franchise fitness brand.”
Randall also points out that because the company isn’t reliant on large scale debt leverage or private equity backing it can be more dynamic when it comes to growth plans.
Assuming would-be franchisees can tick the necessary financial boxes Randall says Anytime Fitness is looking for engaged, motivated and committed individuals - “those who want to tap into the many years’ of experience that sit within both the UK and Global team.”
For would be owners, step one is a discovery session providing a more in-depth description of the brand - would be franchisees then being put in contact with the company’s support office teams to understand areas such as property, financials and training. Running parallel to this are introductions to key partners, such as banks and equipment suppliers.
The process concludes with a meeting with Randall himself, before an offer is made.
This forms part of Randall’s wider philosophy regarding ‘leadership’. As he’s quick to note: “Leadership for me is about having a clear vision, but also being honest, present, aware and approachable to all franchisees and being able to show empathy.” It also means being available to franchisees in the bad times as well as the good ones, so they can emerge stronger.
Despite the competitive nature of the UK fitness market Randall is quick to dismiss suggestions the market is close to saturation at present, though he does concede there will be a natural value further ‘down the road’.
“I think that there is still a large part of the UK left to penetrate - given there has been a consistent increase year on year and no sign of slowing.”
As the ‘2019 State of the UK Fitness Industry Report’ highlighted, a number of milestones (12 months through March 2019) were passed - including hitting £5 billion (by industry value) for the first time, UK membership surpassing 10 million and the elusive 15% market penetration rate being met (15.6%). “I think we could touch close to 20% before we begin to see a plateau, providing the industry and brands continue to serve the demand well,” says Randall.
Looking ahead, Randall suggests industry growth of around 0.5%-1% annually is feasible, principally being driven by larger brands that are continuing to grow aggressively.
“Where some brands have begun to consolidate, we have seen boutique brands and concepts fill that gap and enter the market in recent years,” he says.
“Over the coming years, I’d expect to see the larger brands continue to grow, and in particular Anytime Fitness. The franchise sector provides a great opportunity (for) more rapid growth where property availability and supply of franchisees are equally strong.
Looking 5 years out Randall envisages further consolidation in both the traditional fitness and boutique spaces. The more immediate focus (for the rest of 2020 and early 2021) however, will be to support franchisees (wherever they are) on how to navigate their way out of COVID-19.
In the meantime, a relaxation of lock down rules for gyms may still be a ‘known unknown’ but that hasn’t stopped the industry from lobbying the UK Government hard.
Randall points out that the company (and others) have been collaborating: “to create a framework to keep members and staff safe and feeding this into the relevant government departments, such as DCMS and Public Health England.”
He adds: “We have utilised scientists and virologists to show how we can achieve this and whilst we wait for final sign off you will likely see things such as kit layouts being amended to manage distancing between people working out, managing capacity in clubs (by) using online booking systems and also ramping up our hygiene regimes.”
Crucially: “Whilst many people have found new ways to be active outside, 95% of our members who were surveyed are very keen to return as soon as possible and the gym will still be the primary way to train,” he notes.
As for Anytime Fitness’s own objectives they remain driven by providing optimum facilities for members to train-in, says Randall, as well as consistent service delivery, great equipment and a drive on getting results.
“We are the largest franchise operator in the UK and globally by number of trading sites and the most important facet of that will be ensuring that our franchisees are supported and encouraged to run successful/ profitable businesses (and) who in turn want to grow their own portfolios,” he says - a point not lost on the 60% of franchisees who’ve already gone on to own more than one club.
While business conditions for Anytime Fitness UK have been challenging, for obvious reasons, Randall has used COVID-19 to “hit the big reset button in a way we have never been able to before and possibly will never get again, where we can train and re-train ourselves and our teams to be able to operate in a post-COVID world and provide greater value and engagement with our colleagues and members.”
He notes that the one thing that has really shone through is the level of engagement and increased virtual communication everyone has been able to engage in during lockdown and club closures.
“We have also been able to work on speeding up the completion and delivery of some key projects such as website improvements and (the) refining of internal systems and brand standards,” Randall notes.
Cases in point are the Anytime Fitness app and Anytime Workouts app that not only track activity, but also contain over 1000 pre-made workouts, supported by video coaching - and including the ability to log progress.
“There is a workout builder for members to build their own (regime), using the exercise library. It can also be used by club teams to coach members remotely - by sending them workouts, scheduling workouts and also direct messaging so there can be two-way communication and encouragement.”
Anytime Fitness UK is also developing new functionality around video calling directly in the app, live virtual training sessions and also creating an on-demand platform, which also houses helpful content and member benefits.
Indeed, far from COVID-19 being a millstone over the medium term Randall believes it offers a potential business opportunity.
He explains: “Given the enormity of the impact that COVID-19 has had on concerns people have with their health and resilience to coping, should they catch a virus such as this, I think a new market segment could open up, and those who are gym members but not active users will consider and increase their activities.”
Randall adds that such people will need support, coaching, encouragement, both when they’re in a club, but also when at home or at work. “This lends itself very well to our product at Anytime Fitness, which includes our apps and online platforms that are available for members to access anywhere, anytime,” says Randall.
As a result, Anytime Fitness UK should be better placed than most to take advantage of the ‘new normal’ when the COVID-19 clouds do eventually lift.